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Cirrus Logic chief resigns amid option-dating probe

Markets

March 08, 2007|From Bloomberg News

The chief executive of computer chip maker Cirrus Logic Inc. on Wednesday became the latest executive to resign over allegations of stock option manipulation.

David French, 50, quit after an internal investigation found he had backdated option grants, Austin, Texas-based Cirrus said.

Michael L. Hackworth, Cirrus' 66-year-old co-founder, was named acting CEO.

French's departure came five days after Cirrus announced plans to restate more than five years of results because of errors in accounting for grants.

French, CEO since 1999, "influenced the grant process with a view toward the stock price" and didn't "appreciate the significance" of manipulating the dates, Cirrus said. The company said it would record as much as $24 million in costs to correct the grants.

Cirrus, which makes chips for video and audio applications, is one of more than 200 firms that have disclosed federal or internal probes into whether executives misdated option grants to days when their stocks were depressed, inflating the options' value.

Cirrus filed a termination contract with French "to buy peace" between the two parties by avoiding litigation, according to a regulatory filing. Cirrus will give French $477,600 in compensation in six months. French may have to repay as much as $100,000 in bonuses if the restatements show he didn't meet financial targets, and amend any tax returns and pay all applicable taxes if required.

Cirrus fell 13 cents to $8.41 in regular trading and was little changed after the news, which came after markets closed.

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